Commodities | Aug 24 2010
By Chris Shaw
The global steel sector did it tough in 2009 but the predicted recovery this year is now assured, industry consultant MEPS noting raw steel production in 2010 should be almost 1,400 million tonnes. This would be an increase in output of 14% compared to last year and would represent record production, being 3.7% higher than the previous peak in 2007.
Further increases are expected in coming years, MEPS forecasting global steel output of 1,625 million tonnes in 2014. This would be an increase of 33% from 2009 levels, with all regions expected to contribute to the gains.
In the EU-27 nations MEPS notes total steel production fell by 30% in 2009 to 168.2 million tonnes, but 2010 should see a recovery to output of 201 million tonnes. By 2014 the group expects total crude steel output from the region of 232 million tonnes.
The trend looks similar in the CIS, as while output fell to 97.5 million tonnes in 2009 an increase to 104.9 million tonnes is expected this year. MEPS is forecasting 2014 output of 118 million tonnes.
Among the NAFTA nations steel production fell by almost 50 million tonnes in the two years from 2007, but MEPS sees half of that reduction being recovered this year. The group is forecasting 2010 output of 107.2 million tonnes, up from 82.4 million tonnes in 2009.
By 2014 NATFA crude steel production is forecast to reach 125 million tonnes, MEPS seeing the recovery as steady rather than rapid given weak economic indicators for housing starts and infrastructure projects will take same time to turn around.
South America has enjoyed better domestic steel demand this year, which underpins the expectation of MEPS of a recovery in production to 42.9 million tonnes this year compared to 38.1 million tonnes in 2009. Further steady improvement is expected in coming years, leading to a forecast for 2014 production of 55 million tonnes.
In Africa a modest revival in steel production is expected this year as market conditions generally have improved. MEPS is forecasting crude steel production of 37 million tonnes this year, rising to 45.5 million tonnes in 2014. This compares to output of 32.9 million tonnes last year.
The pace of steel production growth in China is set to slow in coming years according to MEPS, though it still forecasts a five year increase in steel manufacturing of more than 30% for the period 2009 to 2014. From 567.8 million tonnes in 2009, MEPS expects total Chinese crude steel production of 627 million tonnes this year, rising to 743 million tonnes in 2014.
Japanese steel production should also rise sharply this year, MEPS expecting output of 107 million tonnes compared to just 87.5 million tonnes in 2009. Growth in coming years should be modest though, as the group's 2014 forecast stands at just 112.5 million tonnes.
The rest of Asia has also enjoyed a strong rebound in steel production this year and MEPS expects the region will produce 160.4 million tonnes thus year compared to 143.7 million tonnes last year. In 2014 production in the Other Asia region is forecast to be 185.7 million tonnes.
The Oceania region, which includes Australia, should see crude steel production of 7.7 million tonnes according to MEPS, rising to 8.3 million tonnes in 2014. This compares to 2009 production of 6.0 million tonnes.
